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Low on-chain fees are actually a disaster for Bitcoin. Once mining rewards dwindle to nothing due to halvings fees would have to rise astronomically to maintain

Low on-chain fees are actually a disaster for Bitcoin. Once mining rewards dwindle to nothing due to halvings fees would have to rise astronomically to maintain hash power.

javert 5y ago
If bitcoin becomes the world currency, nation states can mine in order to protect the system. I think an equilibrium would be reached. For example, the US is probably OK with Russia having 10% of hash power if the US has 10%, and so on. However, that particular example may be unrealistic, because the US would probably choose poverty over accepting bitcoin.
- warkdarrior 5y ago
  > If bitcoin becomes the world currency, nation states can mine in order to protect the system. That sounds truly decentralized. /s
  - delaaxe 5y ago
    As long as there’s enough countries mining, it’s decentralized enough
madacol 5y ago
It depends on the price, it would need to increase ~10x to maintain hash power with today's fee (Fees are a little more than 10% of miner's reward)
- kragen 5y ago
  How much hashpower do we need to keep the blockchain secure? Maybe it's less than what we have today, though I suspect it's more. (ASIC mining reduces the risk of 51% attacks because there's no huge mass of "dark silicon" that could be temporarily redirected from running Slack or Monster Hunter to mount a 51% attack; the vast majority of hashpower that has been manufactured so far is busily mining away to support the blockchain.) I'm not convinced that higher transaction fees would be a huge disaster. Maybe Lightning will work out (El Salvador seems to be betting heavily on it), or maybe people will use "custodial wallets" like LocalBitcoins, or simply run up a tab at the bar; with any of these approaches, relegating the public blockchain to weekly, monthly, or trimestral settlements for most people would be a mild inconvenience rather than a disaster.

Low on-chain fees are actually a disaster for Bitcoin. Once mining rewards dwindle to nothing due to halvings fees would have to rise astronomically to maintain hash power.

javert 5y ago

If bitcoin becomes the world currency, nation states can mine in order to protect the system. I think an equilibrium would be reached. For example, the US is probably OK with Russia having 10% of hash power if the US has 10%, and so on. However, that particular example may be unrealistic, because the US would probably choose poverty over accepting bitcoin.

warkdarrior 5y ago
> If bitcoin becomes the world currency, nation states can mine in order to protect the system. That sounds truly decentralized. /s
- delaaxe 5y ago
  As long as there’s enough countries mining, it’s decentralized enough

madacol 5y ago

It depends on the price, it would need to increase ~10x to maintain hash power with today's fee (Fees are a little more than 10% of miner's reward)

kragen 5y ago
How much hashpower do we need to keep the blockchain secure? Maybe it's less than what we have today, though I suspect it's more. (ASIC mining reduces the risk of 51% attacks because there's no huge mass of "dark silicon" that could be temporarily redirected from running Slack or Monster Hunter to mount a 51% attack; the vast majority of hashpower that has been manufactured so far is busily mining away to support the blockchain.) I'm not convinced that higher transaction fees would be a huge disaster. Maybe Lightning will work out (El Salvador seems to be betting heavily on it), or maybe people will use "custodial wallets" like LocalBitcoins, or simply run up a tab at the bar; with any of these approaches, relegating the public blockchain to weekly, monthly, or trimestral settlements for most people would be a mild inconvenience rather than a disaster.